Money, faith and skepticism

Robert "Dr. Shine" Freeman, a Maryland minister, took the command "let us pray" and turned it into "let us prey."

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By Michelle Singletary

recordnet.com

By Michelle Singletary

Posted Aug. 15, 2012 at 12:01 AM

By Michelle Singletary

Posted Aug. 15, 2012 at 12:01 AM

» Social News

Robert "Dr. Shine" Freeman, a Maryland minister, took the command "let us pray" and turned it into "let us prey."

Because that's what he did. He preyed on his people.

Prosecutors said Freeman, 56, hid assets to avoid paying hundreds of thousands of dollars in debts. He recently pleaded guilty to obstructing bankruptcy court proceedings and received a 27-month prison sentence. He was ordered to pay more than $630,000 in restitution to four church members who took out loans to buy cars and a mansion.

What Freeman did falls under "affinity fraud"; when people use a personal connection such as religion or ethnic status to gain people's trust and their money.

Nearly one in four Ponzi schemes involves affinity-group targets, according to a study by consulting firm Marquet International of major Ponzi schemes in the United States since 2002.

The people who try to fight affinity fraud will tell you it's a hard scam to prevent. Typically, people are told that if something sounds too good to be true, it probably is. But when that too-good-to-be-true deal or request is coming from someone you trust or is being endorsed by a person you respect, you let your guard down. And this opens you to becoming a victim.

The word "con" in con man stands for "confidence," and that is what these people aim for. They gain your confidence through the affinity group, said Chris Marquet, chief executive of Marquet International.

In 2005, Freeman and his then-spouse filed for bankruptcy protection, claiming they were broke. The couple said they had $1.3 million in debt, including $846,000 in back rent and $87,000 in lease payments on a jet. But they were hiding that they were living in a $1.75 million, 9,000-square-foot home purchased by a church member. Freeman didn't disclose that he had the use of 11 luxury vehicles worth more than $1 million, also purchased by church members. Freeman's ex-wife was not charged.

In another affinity-fraud case announced this month, a federal grand jury indicted Shannon Johnson and his wife, Yvette, of Laytonsville, Md., and Corona, in connection with an alleged fraudulent advance-fee scheme, according to Rod J. Rosenstein, U.S. attorney for the district of Maryland.

The couple developed relationships with pastors, ministers and religious-based organizations, allegedly passing themselves off as philanthropists. In return for "advance banking fees," they promised to provide individual and business investors with money that they claimed they held in an overseas bank account. They allegedly received $3.7 million in fees but never provided the promised financing.

Every time you hear about one of these cases, remind yourself that having trust and faith doesn't mean you shouldn't have an abundance of skepticism.

Contact Michelle Singletary, a personal finance columnist at The Washington Post, at singletarym@washpost.com.